# In the matter of Shalibhadra Cottrade Private Limited CP No. 10-IBC-NCLT-MB-MAH-2019

> NCLT judgment dated 2019-10-22. Citation: TCN-2019-NCLT-00852. The case originates from a petition filed by Dena Bank under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 22 Oct 2019
- **Citation:** TCN-2019-NCLT-00852
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shalibhadra-cottrade-private-limited-cp-no-10-ibc-nclt-mb-mah-2019-02a55c64

## Summary

### Background

The case originates from a petition filed by Dena Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shalibhadra Cottrade Private Limited, the Corporate Debtor, due to a default in repayment of debt. Subsequently, Dena Bank merged with Bank of Baroda, leading to the substitution of the petitioner. The Financial Creditor, Bank of Baroda, claimed a default amount of ₹9,22,75,212/- as of 16.12.2018, with the date of default stated as 31.05.2018. The Corporate Debtor's loan account was declared a Non-Performing Asset (NPA) on 01.10.2018.

## Facts

Dena Bank originally filed a petition against Shalibhadra Cottrade Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, due to a default in debt repayment. Dena Bank subsequently merged with Bank of Baroda, which then became the petitioner. The Financial Creditor, Bank of Baroda, had sanctioned a Cash Credit Facility to the Corporate Debtor, which was increased to ₹8,50,00,000/- by 10.03.2017. The Corporate Debtor hypothecated its book debts of ₹24.50 crore to secure the loan. Guarantors provided collateral security through simple mortgages on certain properties. The guarantors also executed Letters of Guarantee for ₹8.50 crore. The Corporate Debtor executed a promissory note for ₹8.50 crore. The debt was disbursed between 05.01.2012 and

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## Issues and analysis

### Issue 1: Whether the loan account of the Corporate …

**Ratio:** A loan account can be classified as NPA if it remains overdue for a period exceeding 90

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**Reasoning:** The court found that the Corporate Debtor's loan account was consistently in excess of

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**Interpretation:** The interpretation of NPA classification involves assessing whether the loan

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**Application:** In this case, the court applied the ratio by examining the loan account

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## Parties

- **Judges:** M.K. Sh…; Chandra Bha…
- **Appellants:** Bank of B…
- **Respondents:** Shalibhadra…
- **Advocates:** Manoj M…; Anuja Bha…

## Timeline

- **2012-01-01 — Cash Credit Facility…**: Financial Creditor sanctioned a Cash…
- **2017-03-10 — Sanctioned Amount…**: Sanctioned amount…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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